changes to michigan public school employee retirement system sb 1040
DESCRIPTION
Changes to Michigan Public School Employee Retirement System SB 1040 As passed by the Senate and the House Committee 8/15/2012 *It is not intended to be interpreted as current law. GLP & Associates, Inc. and its affiliated companies do not provide legal or tax advice. Action Taken. BASIC. - PowerPoint PPT PresentationTRANSCRIPT
Changes to Michigan Public School Employee Retirement
System
SB 1040
As passed by the Senate and the House Committee 8/15/2012
*It is not intended to be interpreted as current law. GLP & Associates, Inc. and its affiliated
companies do not provide legal or tax advice.
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
BASIC
• 0% Contribution
• Years of Service through Dec. 2012 Multiplier = 1.5%
• Years of Service after Jan 1st, 2013 Multiplier = 1.25%
• Pay 4% of Salary
• 30 years of Service Multiplier = 1.5%
• After 30 years Multiplier = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
Opt in prior to July 1st 2008
M I P
• 3.9% Continues without change
• Years of Service through Dec 2012 Multiplier = 1.5%
• Years of Service after Jan 1st 2013 Multiplier = 1.25%
• Pay 7% of Salary
• 30 Years of Service Multiplier = 1.5%
• Over 30 years Multiplier = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
Start Date July 1st 2008
M I P Plus
• 6.4% Employee Contribution Continues
• Multiplier drops from 1.5% to 1.25% Jan 1st 2013
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
• Employee pays 7% of salary
• 30 Years of Service Multiplier = 1.5%
Over 30 Years of Service = 1.25%
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
July 1st 2010Pension Plus
• 6.4% Employee Contribution Continues
• Multiplier drops from 1.5% to 1.25% Jan 1st 2013
• DC Continues
• Employee pays 7% of salary
• 30 Years of Service Multiplier = 1.5%
• Over 30 Years of Service = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
Choice Between
1 - Pension Plus
2 – Defined Contribution with 50% match from employer, up to 6% of
salary.
EMPLOYEESNEWLY HIRED AFTER
9/4/2012
No retiree health insurance
It is replaced with 401(k) or 457 with a match up to 2% plus $1,000/$2,000 lump sum at retirement
•3% Contribution continues and goes to prefund retiree health care
•If employee not eligible for retiree health care at retirement, contributions are refunded monthly over 5 years after age 60
RETIREE HEALTHCARE FUND
•Opt out of 3% contributions and forego all retiree health care benefits to take 2% DC matching contributions
PERSONAL HEALTHCARE FUND
• Increase retiree health care premiums from 10% to 20% after Jan. 1st, 2013
• Cost stays the same if retiree is 65 or older as of Jan. 1st, 2013
REVISED MEDICAL COSTS
Questions, Comments, Suggestions Welcomed
Alex Kocoves
President & CEOGLP & Associates, Inc.
Michael McEvilly
Vice President of OperationsGLP Strategic Administrative Group, LLC